2.10 “Exchange Act” means the Securities Exchange Act of 1934, as amended.          2.11 “Fair Market Value” means, with respect to the Common Stock, as of any date: (i)the closing sale price of the Common Stock as of such date during the regular daily tradingsession, as reported on the Nasdaq National Market System or on any national exchange (or, if noshares were traded or quoted on such date, as of the next preceding date on which there was such atrade or quote); or (ii) if the Common Stock is not so listed, admitted to unlisted tradingprivileges, or reported on any national exchange or on the Nasdaq National Market System, the meanbetween the reported high and low sale prices as of such date during the regular daily tradingsession, as reported by the Nasdaq SmallCap Market, OTC Bulletin Board, the Bulletin Board Exchange(BBX) or the National Quotation Bureaus, Inc., or other comparable service (or, if no shares weretraded or quoted on such date, as of the next preceding date on which there was such a trade orquote); or (iii) if the Common Stock is not so listed or reported, such price as the Committeedetermines in good faith in the exercise of its reasonable discretion.          2.12 “Good Reason,” unless otherwise defined in an agreement evidencing an IncentiveAward, means the occurrence of any of the following in connection with a Change in Control: (i) asubstantial diminution in the Participant’s authority, duties or responsibilities as in effectprior to the Change in Control, (ii) a reduction by the Company in the Participant’s base salary,or an adverse change in the form or timing of the payment thereof, as in effect immediately priorto the Change in Control or as thereafter increased, or (iii) the Company’s requiring theParticipant to be based at any office or location that is more than fifty (50) miles further fromthe office or location thereof immediately preceding the Change in Control; provided, however, GoodReason shall not include any of the circumstances or events described above unless (A) theParticipant has first provided written notice of such circumstance or event to the Company or itssuccessor and the Company or such successor has not corrected such circumstance or event withinthirty (30) days thereafter; and (B) the Participant has not otherwise consented to the occurrencein writing.          2.13 “Incentive Award” means an Option, Stock Appreciation Right, Restricted StockAward, Stock Unit Award, Performance Award or Stock Bonus granted to an Eligible Recipient pursuantto the Plan.          2.14 “Incentive Stock Option” means a right to purchase Common Stock granted to anEligible Recipient pursuant to Section 6 of the Plan that qualifies as an “incentive stock option”within the meaning of Section 422 of the Code.          2.15 “Non-Statutory Stock Option” means a right to purchase Common Stock granted to anEligible Recipient pursuant to Section 6 of the Plan that does not qualify as an Incentive StockOption.          2.16 “Option” means an Incentive Stock Option or a Non Statutory Stock Option.          2.17 “Participant” means an Eligible Recipient who receives one or more IncentiveAwards under the Plan.          2.18 “Performance Criteria” means the performance criteria that may be used by theCommittee in granting Incentive Awards contingent upon achievement of performance goals, consistingof net sales, operating income, income before income taxes, net income, net income per share (basicor diluted), profitability as measured by return ratios (including return on assets, return onequity, return on investment and return on sales), cash flows, market share, cost reduction goals,margins (including one or more of gross, operating and net income margins), stock price, totalreturn to stockholders, economic value added, working capital and strategic plan development andimplementation. The Committee may select one criterion or multiple criteria for measuringperformance, and the measurement may be based upon Company, Subsidiary or business unitperformance, either absolute or by relative comparison to other companies or any other externalmeasure of the selected criteria.          2.19 “Performance Award” means a right granted to an Eligible Recipient pursuant toSection 10 of the Plan to receive an amount of cash, a number of shares of Common Stock, or acombination of both, contingent upon achievement of Performance Criteria or other objectives duringa specified period.          2.20 “Previously Acquired Shares” means shares of Common Stock that are already ownedby the Participant.          2.21 “Restricted Stock Award” means an award of Common Stock granted to an EligibleRecipient pursuant to Section 8 of the Plan that are subject to restrictions on transferability anda risk of forfeiture.
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          2.22 “Retirement” means termination of employment or service at age 55 or older andcompletion of at least ten years of continuous service.          2.23 “Securities Act” means the Securities Act of 1933, as amended.          2.24 “Stock Appreciation Right” means a right granted to an Eligible Recipientpursuant to Section 7 of the Plan to receive a payment from the Company, in the form of shares ofCommon Stock, cash or a combination of both, equal to the difference between the Fair Market Valueof one or more shares of Common Stock and a specified exercise price of such shares.          2.25 “Stock Bonus” means an award of Common Stock granted to an Eligible Recipientpursuant to Section 11 of the Plan.          2.26 “Stock Unit Award” means a right granted to an Eligible Recipient pursuant toSection 9 of the Plan to receive the Fair Market Value of one or more shares of Common Stock,payable in cash, shares of Common Stock, or a combination of both, the payment, issuance, retentionand /or vesting of which is subject to the satisfaction of specified conditions, which may includeachievement of Performance Criteria or other objectives.          2.27 “Subsidiary” means any entity in which the Company has a “controlling interest”(as defined in Treas. Reg. Sec. 1.409A-1(b)(5)(ii)(E)(1)), either directly or through a chain ofcorporations or other entities in which each corporation or other entity has a “controllinginterest” in another corporation or entity in the chain, as determined by the Committee.          2.28 “Tax Date” means the date any withholding tax obligation arises under the Codefor a Participant with respect to an Incentive Award.3. Plan Administration.          3.1 The Committee. The Plan will be administered by the Board or by a committee ofthe Board. So long as the Company has a class of its equity securities registered under Section 12of the Exchange Act, any committee administering the Plan will consist solely of two or moremembers of the Board who are “non employee directors” within the meaning of Rule 16b 3 under theExchange Act, who are “independent” as required by the listing standards of the Nasdaq Stock Market(or other applicable market or exchange on which the Company’s Common Stock may be quoted ortraded) and who are “outside directors” within the meaning of Section 162(m) of the Code. Such acommittee, if established, will act by majority approval of the members (unanimous approval withrespect to action by written consent), and a majority of the members of such a committee willconstitute a quorum. As used in the Plan, “Committee” will refer to the Board or to such acommittee, if established. To the extent consistent with applicable corporate law of the Company’sjurisdiction of incorporation, the Committee may delegate to any officers of the Company theduties, power and authority of the Committee under the Plan pursuant to such conditions orlimitations as the Committee may establish; provided, however, that only the Committee may exercisesuch duties, power and authority with respect to Eligible Recipients who are subject to Section 16of the Exchange Act or whose compensation in the fiscal year may be subject to the limits ondeductible compensation pursuant to Section 162(m) of the Code. The Committee may exercise itsduties, power and authority under the Plan in its sole and absolute discretion without the consentof any Participant or other party, unless the Plan specifically provides otherwise. Eachdetermination, interpretation or other action made or taken by the Committee pursuant to theprovisions of the Plan will be conclusive and binding for all purposes and on all persons, and nomember of the Committee will be liable for any action or determination made in good faith withrespect to the Plan or any Incentive Award granted under the Plan.          3.2 Authority of the Committee.     (a) In accordance with and subject to the provisions of the Plan, the Committee willhave the authority to determine all provisions of Incentive Awards as the Committee may deemnecessary or desirable and as consistent with the terms of the Plan, including, withoutlimitation, the following: (i) the Eligible Recipients to be selected as Participants; (ii)the nature and extent of the Incentive Awards to be made to each Participant (including thenumber of shares of Common Stock to be subject to each Incentive Award, any exercise price,the manner in which Incentive Awards will vest or become exercisable and whether IncentiveAwards will be granted in tandem with other Incentive Awards) and the form of writtenagreement, if any, evidencing such Incentive Award; (iii) the time or times when IncentiveAwards will be granted; (iv) the duration of each Incentive Award;
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and (v) the restrictions and other conditions to which the payment or vesting ofIncentive Awards may be subject; provided, however, that notwithstanding any other provisionof the Plan: (A) any Incentive Award other than an Option or Stock Appreciation Right willnot vest or become payable over a period of less than three (3) years from the date ofgrant, if vesting or payment is based solely upon the passage of time, and will have aperformance measurement period of not less than one (1) year, if vesting or payment is basedupon satisfaction of Performance Criteria or other objectives; and (B) all Incentive Awardsgranted to non-employee directors shall be granted pursuant to bona fide formulas orpolicies established by the Committee from time to time for the compensation of suchdirectors, as a group, in respect of service as a non-employee director, a member of acommittee of the Board or chair of the Board or a committee of the Board, and the Committeeshall not discriminate among individual non-employee directors in granting or establishingthe terms of Incentive Awards (except to the extent such formulas or policies may bemodified from time to time). In addition, the Committee will have the authority under thePlan in its sole discretion to pay the economic value of any Incentive Award in the form ofcash, Common Stock or any combination of both.     (b) Subject to Section 3.2(d), the Committee will have the authority under the Plan toamend or modify the terms of any outstanding Incentive Award in any manner, including,without limitation, the authority to modify the number of shares or other terms andconditions of an Incentive Award, extend the term of an Incentive Award, accelerate theexercisability or vesting or otherwise terminate any restrictions relating to an IncentiveAward, accept the surrender of any outstanding Incentive Award or, to the extent notpreviously exercised or vested, authorize the grant of new Incentive Awards in substitutionfor surrendered Incentive Awards; provided, however that (A) the Committee shall not beauthorized to accelerate the vesting or payment of any Incentive Award or terminate or waiveany restrictions relating to an Incentive Award without prior approval of the Company’sstockholders, except in connection with the Participant’s death, Disability or Retirement,or in connection with a Change in Control; (B) the amended or modified terms are permittedby the Plan as then in effect; and (C) any Participant adversely affected by such amended ormodified terms has consented to such amendment or modification.     (c) In the event of (i) any reorganization, merger, consolidation, recapitalization,liquidation, reclassification, stock dividend, stock split, combination of shares, rightsoffering, extraordinary dividend or divestiture (including a spin off) or any other changein corporate structure or shares; (ii) any purchase, acquisition, sale, disposition orwrite-down of a significant amount of assets or a significant business; (iii) any change inaccounting principles or practices, tax laws or other such laws or provisions affectingreported results; (iv) any uninsured catastrophic losses or extraordinary non-recurringitems as described in Accounting Principles Board Opinion No. 30 or in management’sdiscussion and analysis of financial performance appearing in the Company’s annual report tostockholders for the applicable year; or (v) any other similar change, in each case withrespect to the Company or any other entity whose performance is relevant to the grant orvesting of an Incentive Award, the Committee (or, if the Company is not the survivingcorporation in any such transaction, the board of directors of the surviving corporation)may, without the consent of any affected Participant, amend or modify the vesting criteria(including Performance Criteria) of any outstanding Incentive Award that is based in wholeor in part on the financial performance of the Company (or any Subsidiary or division orother subunit thereof) or such other entity so as equitably to reflect such event, with thedesired result that the criteria for evaluating such financial performance of the Company orsuch other entity will be substantially the same (in the sole discretion of the Committee orthe board of directors of the surviving corporation) following such event as prior to suchevent; provided, however, that the amended or modified terms are permitted by the Plan asthen in effect, including the limitations in Section 3.2(a) and 3.2(b).     (d) Notwithstanding any other provision of this Plan other than Section 4.3, theCommittee may not, without prior approval of the Company’s stockholders, seek to effect anyre-pricing of any previously granted, “underwater” Option or Stock Appreciation Right by:(i) amending or modifying the terms of the Option or Stock Appreciation Right to lower theexercise price; (ii) canceling the underwater Option or Stock Appreciation Right andgranting either (A) replacement Options or Stock Appreciation Rights having a lower exerciseprice; (B) Restricted Stock Awards; or (C) Stock Unit Awards, Performance Awards or StockBonuses in exchange; or (iii) repurchasing the underwater Options or Stock AppreciationRights and granting new Incentive Awards under this Plan. For purposes of this Section3.2(d), Options and Stock Appreciation Rights will be deemed to be “underwater” at any timewhen the Fair Market Value of the Common Stock is less than the exercise price of the Optionor Stock Appreciation Right.
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     (e) In addition to the authority of the Committee under Section 3.2(b) andnotwithstanding any other provision of the Plan, the Committee may, in its sole discretion,amend the terms of the Plan or Incentive Awards with respect to Participants residentoutside of the United States or employed by a non-U.S. Subsidiary in order to comply withlocal legal requirements, to otherwise protect the Company’s or Subsidiary’s interests, orto meet objectives of the Plan, and may, where appropriate, establish one or more sub-plans(including the adoption of any required rules and regulations) for the purposes ofqualifying for preferred tax treatment under foreign tax laws. The Committee shall have noauthority, however, to take action pursuant to this Section 3.2(e): (i) to reserve shares orgrant Incentive Awards in excess of the limitations provided in Section 4.1; (ii) to effectany re-pricing in violation of Section 3.2(d); (iii) to grant Options having an exerciseprice less than 100% of the Fair Market Value of one share of Common Stock on the date ofgrant in violation of Section 6.2; or (iv) for which stockholder approval would then berequired pursuant to Section 19.     (f) Notwithstanding anything in this Plan to the contrary, the Committee will determinewhether an Incentive Award is subject to the requirements of Section 409A of the Code and,if determined to be subject to Section 409A of the Code, the Committee will make suchIncentive Award subject to such written terms and conditions determined necessary ordesirable to cause such Incentive Award to comply in form with the requirements of Section409A of the Code. Further, the Plan, as it relates to Incentive Awards that are subject toSection 409A of the Code, will be administered in a manner that is intended to comply withthe requirements of Section 409A of the Code and any regulations or rulings issuedthereunder.4. Shares Available for Issuance.          4.1 Maximum Number of Shares Available; Certain Restrictions on Awards. Subject toadjustment as provided in Section 4.3 of the Plan, the maximum number of shares of Common Stockthat will be available for issuance under the Plan will be the sum of:     (a) 11,600,000;     (b) the number of shares subject to outstanding options under the Company’s 2000 EquityIncentive Plan as of the Effective Date which are not thereafter issued or which have beenissued but are subsequently forfeited and which would otherwise have been available forfurther issuance under such plan, assuming, however, that the provisions of Section 4.2 ofthe Plan applied thereto;     (c) the number of shares issued or Incentive Awards granted under the Plan inconnection with the settlement, assumption or substitution of outstanding awards orobligations to grant future awards as a condition of the Company and/or any Subsidiary(ies)acquiring, merging or consolidating with another entity; and     (d) the number of shares that are unallocated and available for grant under a stockplan assumed by the Company or any Subsidiary(ies) in connection with the merger,consolidation, or acquisition of another entity by the Company and/or any of itsSubsidiaries, based on the applicable exchange ratio and other transaction terms, but onlyto the extent that such shares may be utilized by the Company or its Subsidiaries followingthe transaction pursuant to the rules and regulations of the Nasdaq Stock Market (or otherapplicable market or exchange on which the Company’s Common Stock may be quoted or traded).The shares available for issuance under the Plan may, at the election of the Committee, be eithertreasury shares or shares authorized but unissued, and, if treasury shares are used, all referencesin the Plan to the issuance of shares will, for corporate law purposes, be deemed to mean thetransfer of shares from treasury. Notwithstanding any other provisions of the Plan to thecontrary, (i) no Participant in the Plan may be granted Options and Stock Appreciation Rightsrelating to more than 1,500,000 shares of Common Stock in the aggregate during any calendar year;(ii) no Participant in the Plan may be granted Restricted Stock Awards, Stock Unit Awards,Performance Awards and Stock Bonuses relating to more than 500,000 shares of Common Stock in theaggregate during any calendar year; (iii) no Participant in the Plan may be granted IncentiveAwards denominated in cash in an amount in excess of $1,000,000 in the aggregate during anycalendar year; and (iv) no more than 11,600,000 shares of Common Stock may be issued pursuant tothe exercise of Incentive Stock Options granted under the Plan. All of the foregoing share limitsare subject, in each case, to adjustment as provided in Section 4.3 of the Plan. In addition, thelimits set forth in clauses (i) and (ii) above will not apply to Incentive Awards granted as aresult of the Company’s assumption or substitution of like awards issued by any acquired, merged orconsolidated entity pursuant to the applicable transaction terms, and the limit in clause (iv)above will not apply to any Incentive Stock Options
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that are assumed or substituted pursuant to the applicable provisions of the Code in connectionwith any acquisition, consolidation or merger.          4.2 Accounting for Incentive Awards. Shares of Common Stock that are issued under thePlan or that are potentially issuable pursuant to outstanding Incentive Awards will be applied toreduce the maximum number of shares of Common Stock remaining available for issuance under thePlan; provided, however, that the total number of shares that may be issued under the Plan shall bereduced by one additional share for each share issued pursuant to an Incentive Award other than anOption or a Stock Appreciation Right, or potentially issuable pursuant to an outstanding IncentiveAward other than an Option or a Stock Appreciation Right. All shares so subtracted from the amountavailable under the Plan with respect to an Incentive Award that lapses, expires, is forfeited(including issued shares forfeited under a Restricted Stock Award) or for any reason is terminatedunexercised or unvested or is settled or paid in cash or any form other than shares of Common Stockwill automatically again become available for issuance under the Plan; provided, however, that (i)any shares which would have been issued upon any exercise of an Option but for the fact that theexercise price was paid by a “net exercise” pursuant to Section 6.4(b) or the tender or attestationas to ownership of Previously Acquired Shares will not again become available for issuance underthe Plan; and (ii) shares covered by a Stock Appreciation Right, to the extent exercised, will notagain become available for issuance under the Plan. Furthermore, shares withheld for the paymentof taxes in connection with an Incentive Award will not again become available for issuance underthe Plan.          4.3 Adjustments to Shares and Incentive Awards. In the event of any reorganization,merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stocksplit, combination of shares, rights offering, divestiture or extraordinary dividend (including aspin off) or any other change in the corporate structure or shares of the Company, the Committee(or, if the Company is not the surviving corporation in any such transaction, the board ofdirectors of the surviving corporation) will make appropriate adjustment (which determination willbe conclusive) as to the number and kind of securities or other property (including cash) availablefor issuance or payment under the Plan and, in order to prevent dilution or enlargement of therights of Participants, (a) the number and kind of securities or other property (including cash)subject to outstanding Incentive Awards, and (b) the exercise price of outstanding Options andStock Appreciation Rights.5. Participation.          Participants in the Plan will be those Eligible Recipients who, in the judgment of theCommittee, have contributed, are contributing or are expected to contribute to the achievement ofeconomic objectives of the Company or its Subsidiaries. Eligible Recipients may be granted fromtime to time one or more Incentive Awards, singly or in combination or in tandem with otherIncentive Awards, as may be determined by the Committee in its sole discretion. Incentive Awardswill be deemed to be granted as of the date specified in the grant resolution of the Committee,which date will be the date of any related agreement with the Participant.6. Options.          6.1 Grant. An Eligible Recipient may be granted one or more Options under the Plan,and such Options will be subject to such terms and conditions, consistent with the other provisionsof the Plan, as may be determined by the Committee in its sole discretion. The Committee maydesignate whether an Option is to be considered an Incentive Stock Option or a Non Statutory StockOption. To the extent that any Incentive Stock Option granted under the Plan ceases for any reasonto qualify as an “incentive stock option” for purposes of Section 422 of the Code, such IncentiveStock Option will continue to be outstanding for purposes of the Plan but will thereafter be deemedto be a Non Statutory Stock Option.          6.2 Exercise Price. The per share price to be paid by a Participant upon exercise ofan Option will be determined by the Committee in its discretion at the time of the Option grant,provided that such price will not be less than 100% of the Fair Market Value of one share of CommonStock on the date of grant (or 110% of the Fair Market Value of one share of Common Stock on thedate of grant of an Incentive Stock Option if, at the time the Incentive Stock Option is granted,the Participant owns, directly or indirectly, more than 10% of the total combined voting power ofall classes of stock of the Company or any parent or subsidiary corporation of the Company).Notwithstanding the foregoing, to the extent that Options are granted under the Plan as a result ofthe Company’s assumption or substitution of options issued by any acquired, merged or consolidatedentity, the exercise price for such Options shall be the price determined by the Committee pursuantto the conversion terms applicable to the transaction.          6.3 Exercisability and Duration. An Option will become exercisable at such times andin such installments and upon such terms and conditions as may be determined by the Committee inits sole discretion at the time of grant ,
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including without limitation (i) the achievement of one or more of the Performance Criteria;and/or that (ii) the Participant remain in the continuous employ or service of the Company or aSubsidiary for a certain period; provided, however, that no Option may be exercisable after seven(7) years from its date of grant (five years from its date of grant in the case of an IncentiveOption if, at the time the Incentive Stock Option is granted, the Participant owns, directly orindirectly, more than 10% of the total combined voting power of all classes of stock of the Companyor any parent or subsidiary corporation of the Company).          6.4 Payment of Exercise Price.     (a) The total purchase price of the shares to be purchased upon exercise of an Optionwill be paid entirely in cash (including check, bank draft or money order); provided,however, that the Committee, in its sole discretion and upon terms and conditionsestablished by the Committee, may allow such payments to be made, in whole or in part, by(i) tender of a Broker Exercise Notice; (ii) by tender, or attestation as to ownership, ofPreviously Acquired Shares that have been held for the period of time necessary to avoid acharge to the Company’s earnings for financial reporting purposes and that are otherwiseacceptable to the Committee; (iii) to the extent permissible under applicable law, bydelivery of a promissory note (on terms acceptable to the Committee in its sole discretion);(iv) by a “net exercise of the Option (as further described in paragraph (b), below); or(v) by a combination of such methods.     (b) In the case of a “net exercise” of an Option, the Company will not require apayment of the exercise price of the Option from the Participant but will reduce the numberof shares of Common Stock issued upon the exercise by the largest number of whole sharesthat has a Fair Market Value that does not exceed the aggregate exercise price for theshares exercised under this method. Shares of Common Stock will no longer be outstandingunder an Option (and will therefore not thereafter be exercisable) following the exercise ofsuch Option to the extent of (i) shares used to pay the exercise price of an Option underthe “net exercise,” (ii) shares actually delivered to the Participant as a result of suchexercise and (iii) any shares withheld for purposes of tax withholding pursuant to Section13.1.     (c) Previously Acquired Shares tendered or covered by an attestation as payment of anOption exercise price will be valued at their Fair Market Value on the exercise date.          6.5 Manner of Exercise. An Option may be exercised by a Participant in whole or inpart from time to time, subject to the conditions contained in the Plan and in the agreementevidencing such Option, by delivery in person, by facsimile or electronic transmission or throughthe mail of written notice of exercise to the Company at its principal executive office inMinnetonka, Minnesota and by paying in full the total exercise price for the shares of Common Stockto be purchased in accordance with Section 6.4 of the Plan.7. Stock Appreciation Rights.          7.1 Grant. An Eligible Recipient may be granted one or more Stock Appreciation Rightsunder the Plan, and such Stock Appreciation Rights will be subject to such terms and conditions,consistent with the other provisions of the Plan, as may be determined by the Committee in its solediscretion. The Committee will have the sole discretion to determine the form in which payment ofthe economic value of Stock Appreciation Rights will be made to a Participant (i.e., cash, CommonStock or any combination thereof) or to consent to or disapprove the election by a Participant ofthe form of such payment.          7.2 Exercise Price. The exercise price of a Stock Appreciation Right will bedetermined by the Committee, in its discretion, at the date of grant but may not be less than 100%of the Fair Market Value of one share of Common Stock on the date of grant, except as provided inSection 7.4, below. Notwithstanding the foregoing, to the extent that Stock Appreciation Rightsare granted under the Plan as a result of the Company’s assumption or substitution of stockappreciation rights issued by any acquired, merged or consolidated entity, the exercise price forsuch Stock Appreciation Rights shall be the price determined by the Committee pursuant to theconversion terms applicable to the transaction.          7.3 Exercisability and Duration. A Stock Appreciation Right will become exercisableat such time and in such installments as may be determined by the Committee in its sole discretionat the time of grant; provided, however, that no Stock Appreciation Right may be exercisable afterseven (7) years from its date of grant. A Stock Appreciation Right will be exercised by givingnotice in the same manner as for Options, as set forth in Section 6.5 of the Plan.
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          7.4 Grants in Tandem with Options. Stock Appreciation Rights may be granted alone orin addition to other Incentive Awards, or in tandem with an Option, either at the time of grant ofthe Option or at any time thereafter during the term of the Option. A Stock Appreciation Rightgranted in tandem with an Option shall cover the same number of shares of Common Stock as coveredby the Option (or such lesser number as the Committee may determine), shall be exercisable at suchtime or times and only to the extent that the related Option is exercisable, have the same term asthe Option and shall have an exercise price equal to the exercise price for the Option. Upon theexercise of a Stock Appreciation Right granted in tandem with an Option, the Option shall becanceled automatically to the extent of the number of shares covered by such exercise; conversely,upon exercise of an Option having a related Stock Appreciation Right, the Stock Appreciation Rightshall be canceled automatically to the extent of the number of shares covered by the Optionexercise.8. Restricted Stock Awards.          8.1 Grant. An Eligible Recipient may be granted one or more Restricted Stock Awardsunder the Plan, and such Restricted Stock Awards will be subject to such terms and conditions,consistent with the other provisions of the Plan, as may be determined by the Committee in its solediscretion. The Committee may impose such restrictions or conditions, not inconsistent with theprovisions of the Plan, to the vesting of such Restricted Stock Awards as it deems appropriate,including, without limitation, (i) the achievement of one or more of the Performance Criteria;and/or that (ii) the Participant remain in the continuous employ or service of the Company or aSubsidiary for a certain period.          8.2 Rights as a Stockholder; Transferability. Except as provided in Sections 8.1,8.3, 8.4 and 15.3 of the Plan, a Participant will have all voting, dividend, liquidation and otherrights with respect to shares of Common Stock issued to the Participant as a Restricted Stock Awardunder this Section 8 upon the Participant becoming the holder of record of such shares as if suchParticipant were a holder of record of shares of unrestricted Common Stock.          8.3 Dividends and Distributions. Unless the Committee determines otherwise in itssole discretion (either in the agreement evidencing the Restricted Stock Award at the time of grantor at any time after the grant of the Restricted Stock Award), any dividends or distributions(other than regular quarterly cash dividends) paid with respect to shares of Common Stock subjectto the unvested portion of a Restricted Stock Award will be subject to the same restrictions as theshares to which such dividends or distributions relate. The Committee will determine in its solediscretion whether any interest will be paid on such dividends or distributions.          8.4 Enforcement of Restrictions. To enforce the restrictions referred to in thisSection 8, the Committee may place a legend on the stock certificates referring to suchrestrictions and may require the Participant, until the restrictions have lapsed, to keep the stockcertificates, together with duly endorsed stock powers, in the custody of the Company or itstransfer agent, or to maintain evidence of stock ownership, together with duly endorsed stockpowers, in a certificateless book entry stock account with the Company’s transfer agent.9. Stock Unit Awards.          An Eligible Recipient may be granted one or more Stock Unit Awards under the Plan, and suchStock Unit Awards will be subject to such terms and conditions, consistent with the otherprovisions of the Plan, as may be determined by the Committee in its sole discretion. TheCommittee may impose such restrictions or conditions, not inconsistent with the provisions of thePlan, to the payment, issuance, retention and/or vesting of such Stock Unit Awards as it deemsappropriate, including, without limitation, (i) the achievement of one or more of the PerformanceCriteria; and/or that (ii) the Participant remain in the continuous employ or service of theCompany or a Subsidiary for a certain period; provided, however, that in all cases payment of aStock Unit Award will be made within two and one-half months following the end of the EligibleRecipient’s tax year during which receipt of the Stock Unit Award is no longer subject to a“substantial risk of forfeiture” within the meaning of Section 409A of the Code.10. Performance Awards.          An Eligible Recipient may be granted one or more Performance Awards under the Plan, and suchPerformance Awards will be subject to such terms and conditions, if any, consistent with the otherprovisions of the Plan, as may be determined by the Committee in its sole discretion, including,but not limited to, the achievement of one or more of the Performance Criteria; provided, however,that in all cases payment of the Performance Award will be made within two and one-half monthsfollowing the end of the Eligible Recipient’s tax year during which receipt of the PerformanceAward is no longer subject to a “substantial risk of forfeiture” within the meaning of Section 409Aof the Code.
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11. Stock Bonuses.          An Eligible Recipient may be granted one or more Stock Bonuses under the Plan, and such StockBonuses will be subject to such terms and conditions, if any, consistent with the other provisionsof the Plan, as may be determined by the Committee in its sole discretion, including, but notlimited to, the achievement of one or more of the Performance Criteria; provided, however, that inall cases payment of the Performance Award will be made within two and one-half months followingthe end of the Eligible Recipient’s tax year during which receipt of the Performance Award is nolonger subject to a “substantial risk of forfeiture” within the meaning of Section 409A of theCode.12. Effect of Termination of Employment or Other Service. The following provisions shallapply upon termination of a Participant’s employment or other service with the Company and allSubsidiaries, except to the extent that the Committee provides otherwise in an agreement evidencingan Incentive Award at the time of grant or determines pursuant to Section 12.4.          12.1 Termination of Employment Due to Death or Retirement. Subject to Section 12.5 ofthe Plan, in the event a Participant’s employment or other service with the Company and allSubsidiaries is terminated by reason of death or Retirement:     (a) All outstanding Options and Stock Appreciation Rights then held by the Participantwill, to the extent exercisable as of such termination, remain exercisable in full for aperiod of twelve months after such termination (but in no event after the expiration date ofany such Option or Stock Appreciation Right). Options and Stock Appreciation Rights notexercisable as of such termination will be forfeited and terminate;     (b) All Restricted Stock Awards then held by the Participant that have not vested as ofsuch termination will be terminated and forfeited; and     (c) All outstanding but unpaid Stock Unit Awards, Performance Awards and Stock Bonusesthen held by the Participant will be terminated and forfeited.          12.2 Termination of Employment Due to Disability. Subject to Section 12.5 of thePlan, in the event a Participant’s employment or other service with the Company and allSubsidiaries is terminated by reason of Disability:     (a) All outstanding Options and Stock Appreciation Rights then held by the Participantwill, to the extent exercisable as of such termination, remain exercisable in full for aperiod of six months after such termination (but in no event after the expiration date ofany such Option or Stock Appreciation Right). Options and Stock Appreciation Rights notexercisable as of such termination will be forfeited and terminate;     (b) All Restricted Stock Awards then held by the Participant that have not vested as ofsuch termination will be terminated and forfeited; and     (c) All outstanding but unpaid Stock Unit Awards, Performance Awards and Stock Bonusesthen held by the Participant will be terminated and forfeited.          12.3 Termination of Employment for Reasons Other than Death, Disability or Retirement.Subject to Section 12.5 of the Plan, in the event a Participant’s employment or other service isterminated with the Company and all Subsidiaries for any reason other than death, Disability orRetirement, or a Participant is in the employ or service of a Subsidiary and the Subsidiary ceasesto be a Subsidiary of the Company (unless the Participant continues in the employ or service of theCompany or another Subsidiary):     (a) All outstanding Options and Stock Appreciation Rights then held by the Participantwill, to the extent exercisable as of such termination, remain exercisable in full for aperiod of three months after such termination (but in no event after the expiration date ofany such Option or Stock Appreciation Right). Options and Stock Appreciation Rights notexercisable as of such termination will be forfeited and terminate;     (b) All Restricted Stock Awards then held by the Participant that have not vested as ofsuch termination will be terminated and forfeited; and
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     (c) All outstanding but unpaid Stock Unit Awards, Performance Awards and Stock Bonusesthen held by the Participant will be terminated and forfeited.          12.4 Modification of Rights Upon Termination. Notwithstanding the other provisions ofthis Section 12, upon a Participant’s termination of employment or other service with the Companyand all Subsidiaries, the Committee may, in its sole discretion (which may be exercised at any timeon or after the date of grant, including following such termination), cause Options or StockAppreciation Rights (or any part thereof) then held by such Participant to terminate, become orcontinue to become exercisable and/or remain exercisable following such termination of employmentor service, and Restricted Stock Awards, Stock Unit Awards or Performance Awards then held by suchParticipant to terminate, vest and/or continue to vest or become free of restrictions andconditions to payment, as the case may be, following such termination of employment or service, ineach case in the manner determined by the Committee; provided, however, that (i) no Incentive Awardmay remain exercisable or continue to vest for more than two years beyond the date such IncentiveAward would have terminated if not for the provisions of this Section 12.4 but in no event beyondits expiration date; (ii) the Committee shall not be authorized to accelerate the vesting orpayment of any Incentive Award or terminate or waive any restrictions relating to an IncentiveAward without prior approval of the Company’s stockholders, except in connection with theParticipant’s death, Disability or Retirement, or in connection with a Change in Control; and (iii)any such action adversely affecting any outstanding Incentive Award will not be effective withoutthe consent of the affected Participant (subject to the right of the Committee to take whateveraction it deems appropriate under Sections 3.2(c), 4.3 and 14 of the Plan).          12.5 Effects of Actions Constituting Cause. Notwithstanding anything in the Plan tothe contrary, in the event that a Participant is determined by the Committee, acting in its solediscretion, to have committed any action which would constitute Cause as defined in Section 2.3,irrespective of whether such action or the Committee’s determination occurs before or aftertermination of such Participant’s employment with the Company or any Subsidiary, all rights of theParticipant under the Plan and any agreements evidencing an Incentive Award then held by theParticipant shall terminate and be forfeited without notice of any kind. The Company may defer theexercise of any Option, the vesting of any Restricted Stock Award or the payment of any Stock UnitAward, Performance Award or Stock Bonus for a period of up to forty-five (45) days in order for theCommittee to make any determination as to the existence of Cause.          12.6 Determination of Termination of Employment or Other Service.     (a) The change in a Participant’s status from that of an employee of the Company or anySubsidiary to that of a non-employee consultant or advisor of the Company or any Subsidiarywill, for purposes of the Plan, be deemed to result in a termination of such Participant’semployment with the Company and its Subsidiaries, unless the Committee otherwise determinesin its sole discretion.     (b) The change in a Participant’s status from that of a non-employee consultant oradvisor of the Company or any Subsidiary to that of an employee of the Company or anySubsidiary will not, for purposes of the Plan, be deemed to result in a termination of suchParticipant’s service as a non-employee consultant or advisor with the Company and itsSubsidiaries, and such Participant will thereafter be deemed to be an employee of theCompany or its Subsidiaries until such Participant’s employment is terminated, in whichevent such Participant will be governed by the provisions of this Plan relating totermination of employment (subject to paragraph (a), above).     (c) Unless the Committee otherwise determines in its sole discretion, a Participant’semployment or other service will, for purposes of the Plan, be deemed to have terminated onthe date recorded on the personnel or other records of the Company or the Subsidiary forwhich the Participant provides employment or other service, as determined by the Committeein its sole discretion based upon such records; provided, however, if distribution of anIncentive Award subject to Section 409A of the Code is triggered by a termination of aParticipant’s employment or service, such termination must also constitute a “separationfrom service” within the meaning of Section 409A of the Code.          12.7 Breach of Confidentiality, Non-Compete or Non-Solicitation Agreements.Notwithstanding anything in the Plan to the contrary and in addition to the rights of the Committeeunder Section 12.5, in the event that a Participant materially breaches the terms of anyconfidentiality, non-compete or non-solicitation agreement entered into with the Company or anySubsidiary (including a confidentiality, non-compete or non-solicitation agreement made inconnection with the grant of an Incentive Award), whether such breach occurs before or aftertermination of such Participant’s
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employment or other service with the Company or any Subsidiary, the Committee in its solediscretion may require the Participant to surrender shares of Common Stock received, and todisgorge any profits (however defined by the Committee), made or realized by the Participant inconnection with any Incentive Awards or any shares issued upon the exercise or vesting of anyIncentive Awards.13. Payment of Withholding Taxes.          13.1 General Rules. The Company is entitled to (a) withhold and deduct from futurewages of the Participant (or from other amounts that may be due and owing to the Participant fromthe Company or a Subsidiary), or make other arrangements for the collection of, all legallyrequired amounts necessary to satisfy any and all federal, foreign, state and local withholding andemployment related tax requirements attributable to an Incentive Award, including, withoutlimitation, the grant, exercise or vesting of, or payment of dividends with respect to, anIncentive Award or a disqualifying disposition of stock received upon exercise of an IncentiveStock Option; (b) withhold cash paid or payable or shares of Common Stock from the shares issued orotherwise issuable to the Participant in connection with an Incentive Award; or (c) require theParticipant promptly to remit the amount of such withholding to the Company before taking anyaction, including issuing any shares of Common Stock, with respect to an Incentive Award.          13.2 Special Rules. The Committee may, in its sole discretion and upon terms andconditions established by the Committee, permit or require a Participant to satisfy, in whole or inpart, any withholding or employment related tax obligation described in Section 13.1 of the Plan byelecting to tender, or by attestation as to ownership of, Previously Acquired Shares that have beenheld for the period of time necessary to avoid a charge to the Company’s earnings for financialreporting purposes and that are otherwise acceptable to the Committee, by delivery of a BrokerExercise Notice or a combination of such methods. For purposes of satisfying a Participant’swithholding or employment-related tax obligation, Previously Acquired Shares tendered or covered byan attestation will be valued at their Fair Market Value.14. Change in Control.          14.1 A “Change in Control” shall be deemed to have occurred if the event set forth inany one of the following paragraphs shall have occurred:     (a) The acquisition by any individual, entity or group (within the meaning of Section13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”) of beneficial ownership(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more (on afully diluted basis) of either (A) the then outstanding shares of Common Stock, taking intoaccount as outstanding for this purpose shares of Common Stock issuable upon the exercise ofoptions or warrants, the conversion of convertible stock or debt, and the exercise of anysimilar right to acquire shares of Common Stock (the “Outstanding Company CommonStock”) or (B) the combined voting power of the then outstanding voting securities ofthe Company entitled to vote generally in the election of directors (the “OutstandingCompany Voting Securities”); provided, however, that for purposes of this subsection(i), the following acquisitions shall not constitute a Change of Control: (x) anyacquisition by the Company or any “affiliate” of the Company, within the meaning of 17C.F.R. ss. 230.405 (an “Affiliate”), (y) any acquisition by any employee benefitplan (or related trust) sponsored or maintained by the Company or any Affiliate of theCompany, (z) any acquisition by any corporation pursuant to a transaction which complieswith clauses (A), (B) and (C) of subsection (b) of this Section 14.1 (persons and entitiesdescribed in clauses (x), (y) and (z) being referred to herein as “PermittedHolders”); or     (b) The consummation of a reorganization, merger or consolidation or sale or otherdisposition of all or substantially all of the assets of the Company (a “BusinessCombination”), in each case, unless, following such Business Combination, (A) all orsubstantially all of the individuals and entities who were the beneficial owners,respectively, of the Outstanding Company Common Stock and Outstanding Company VotingSecurities immediately prior to such Business Combination beneficially own, directly orindirectly, more than 60% of, respectively, the then outstanding shares of Stock and thecombined voting power of the then outstanding voting securities entitled to vote generallyin the election of directors, as the case may be, of the corporation resulting from suchBusiness Combination (including, without limitation, a corporation which as a result of suchtransaction owns the Company or all or substantially all of the Company’s assets eitherdirectly or through one or more subsidiaries) in substantially the same proportions as theirownership, immediately prior to such Business Combination of the Outstanding Company CommonStock and Outstanding Company Voting Securities, as the case may be, and (B) no Person(excluding any Permitted Holder) beneficially owns, directly or indirectly, 50% or
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more (on a fully diluted basis) of, respectively, the then outstanding shares of commonstock of the corporation resulting from such Business Combination, taking into account asoutstanding for this purpose such common stock issuable upon the exercise of options orwarrants, the conversion of convertible stock or debt, and the exercise of any similar rightto acquire such common stock, or the combined voting power of the then outstanding votingsecurities of such corporation except to the extent that such ownership existed prior to theBusiness Combination and (C) at least a majority of the members of the board of directors ofthe corporation resulting from such Business Combination were members of the incumbent Boardof Directors of the Company at the time of the execution of the initial agreement providingfor such Business Combination; or     (c) Approval by the shareholders of the Company of a complete liquidation ordissolution of the Company; or     (d) The sale of at least 80% of the assets of the Company to an unrelated party, orcompletion of a transaction having a similar